23rd October 2020

The silent but critical foundation needed to support regional prosperity

Brett Barningham, Managing Director of Local and State Government ANZ, Civica

This article first appeared in iTWire in October 2020.

The government’s latest Budget has been described by some as one of “shock and awe” levels of spending, including billions on regional infrastructure. The figures are truly eye-watering – and confirmation that the government is seeking to use its purchasing power to enhance overall demand amid a record recession.

Yet although physical infrastructure does have a key part to play in stimulating the economy as we look to recover from the economic shock of COVID-19, the government’s decision to set out billions of dollars for “shovel-ready” regional infrastructure does not address one of the primary challenges local governments face to sustainably serve citizens into the future: digital infrastructure.

In fact, the capital infrastructure-driven approach could further strain local government’s ability to support their communities. That is, unless more of these funds – much of which are set to be provided on a “use it or lose it” basis – are directed towards developing the supporting digital infrastructure and staff capabilities in local government.

Of course, this is not to say that many will not be celebrating the government’s decision to add an extra $14 billion to its already significant 10-year infrastructure program, in order to stimulate “new and accelerated” projects across each state and create tens of thousands of jobs.

The fact the spending is now set to be complimented by a $30 million cash injection for the Regional Connectivity Program is also to be commended. This will support desperately needed telecommunications and digital connectivity in regional areas, in a bid to lessen the digital divide and help non-metro areas prosper. It may also encourage people to return to regional areas as we embrace working from home.

But it is only by investing in digital tools in local government and upskilling staff around IT and change management that the government can better enable them to sustainably deliver this physical infrastructure that is so needed to support growth, and position local councils to deliver an effective response to future challenges and citizen needs.

COVID-19 shines a light on digital shortcomings

Like many issues, the digital challenge faced by many local councils was highlighted by COVID-19. Many councils I spoke to when pandemic lockdowns were first ordered found themselves seriously challenged to complete basic tasks as a result of not being able to come into the office.

Largely manual processes caused problems when it came to supporting both employees and citizens, ranging from collecting revenue to providing services. Issues included difficulties recording hours worked, gaining leave approvals, distributing work and determining progress on projects being conducted at a distance. Outside of the office, challenges emerged collecting payments and feedback on community issues, and receiving and processing development applications.

Today the need to address the digital divide between local councils in regional and metropolitan areas is becoming increasingly more urgent. Not least due to the additional project delivery demands that the government’s infrastructure plans place on local government.

By investing in local government’s IT foundation, the federal government can not only improve the efficiency of existing project managers and others who will be tasked with delivering on infrastructure and service delivery within local government in coming years. It may also ease skills shortages as technology makes it easier for local governments to access the talents and skills of new resources who may not live in the area. Or indeed may want to come back.

The government clearly understands the difference technology can make. Its $800 million digital business plan is intended to enable businesses to take advantage of digital technologies to grow and create jobs as part of Australia’s economic recovery plan. The plan is forecast to deliver an increase in Australia’s GDP by $6.4 billion a year by 2024.

Of course, this is not to say that technology is a silver bullet. Like many organisations, local governments have often faced significant cultural barriers to overcome when it comes to digital transformation, with these too often impeding the delivery of, maintenance and maximisation of benefits from IT investments.

In a major survey of local government leaders in Australia and New Zealand by the University of Technology Sydney (UTS) and Civica, approximately 70 percent of survey respondents claim that limited working budgets act as a major constraint to digital transformative change, while 65 percent believe organisational culture is an impediment.

This demonstrates how critical it is that change management is also given attention at this time, as the federal government looks to local government to play a primary role in Australia’s recovery.

“Shovel-ready” and “shock and awe” are necessary, but if their intended impact isn’t going to fizzle, the less headline-grabbing digital foundation must also become an investment focus. It is these digital tools and change management skills that will enable local government councils to truly turbocharge the economy post-pandemic.